Woolworths Group Ltd · ASX:WOW
Woolworths — Shareholder Meeting (November 2002)
27 slides from Woolworths's shareholder meeting presentation, Nov 22, 2002
Slide 1: 2002 Annual General Meeting
2002 ANNUAL (GENERAL MEETING WOOLWORTHS LIMITED #%
Slide 2: Annual General Meeting - Roger Corbett, CEO
WOOLWORTHS WOOLWORTHSLIMITED LIMITED Annual General Meeting ROGER CORBETT Chief Executive Officer 22 November 2002
Slide 3: Delivering Value to Shareholders and Customers
WOOLWORTHS LIMITED DELIVERING VALUE TO: SHAREHOLDERS AND CUSTOMERS 1
Slide 4: Woolworths Business Profile
WOOLWORTHS BUSINESS PROFILE S ales Y ear to S tore N um bers 30 Jun e 2002 (curren t) $M ’s Food and Liquor 19,595.0 686 S uperm arkets 146 Liquor S tores (including D an M urphy) P lus P etrol 1,119.3 269 B ig W 2,280.5 104 C onsum er E lectronics 659.0 360 C ontinuing ti i (1) O perations 23,653.8
Slide 5: Woolworths Victorian Business
WOOLWORTHS VICTORIAN BUSINESS Stores Warehouses Employees Supermarkets 174 4 29 616 29,616 Dan Murphy 12 - 520 BWS/First Estate 10 - 82 Plus Petrol 85 - 790 Big W 16 - 3,980 Consumer 74 - 821 Electronics Total 371 4 35,809 Woolworths has a $1.5 $1 5 billion investment in Victoria 3
Slide 6: Results Highlights Y/E 30/6/02
RESULTS HIGHLIGHTS Y/E 30/6/02 • Sales up 17.0% to $24.5 billion • Costs down 38 basis points to 21.84% • g before Interest and Tax ((EBIT)) up Earnings p 17.8% • Net Operating Profit after Tax and servicing Income Notes up 22.2% to $523.2 million • Earnings per share up 25.1% to 50.24 cents • Divid
Slide 7: Sales Growth
SALES GROWTH $3½ billion sales growth driven by - $2 billion organic & bolt ons - $1 billion ex-Franklins stores - $½ billi billion 53rd 53 d weekk 26,000 24,473.0 24,000 22,000 20,915.1 , +14 9%* +14.9% Million 20,000 18,988.8 +10.1% 17,527.3 18,000 , $M +8 3% +8.3% 16,001.1 * 16,000 +9.5% 14 000 1
Slide 8: First Quarter Sales Results
FIRST QUARTER SALES RESULTS Comparable ( Millions)) ($ Store Sales FY2002 FY2003 Increase Increase Food and Liquor 4,751 4 751 5,387 5 387 13.4% 13 4% 5 5% 5.5% Petrol 211 373 76.8% Supermarkets 4,962 5,760 16.1% BIG W 521 587 12.7% 6.4% Consumer Electronics 153 188 22.9% 12.3% General Merchandise 6
Slide 9: CODB / Sales
CODB / SALES 25 Costs = The Key Enabler Down 38pts Down 23.95 in FYO2 211pts in 24 23.59 3yrs 23.09 23 22.22 Cumulative % 22 21 84 21.84 Reductions $1,042 mil 21 20 19 1998 # 1999 # 2000 # 2001 2002 Cost 0.86%x $19.0 b 1.73%x $20.9 b 2.11%x $24.5 b ` Reduction $163 m $362 m $517 m = $1042 m # Adjust
Slide 10: Gross Profit Margin
GROSS PROFIT MARGIN Margin 0.67%x $19.0 b 1.43%x $20.9 b 1.79%x $24.5 b Reduction $127 m $299 m $438 m = $864 m 28 LOWERING THE COST OF LIVING 83% OF 27.03 INCREASE REDUCTION TO 27 26.82 CUSTOMERS 26 36 26.36 DOWN DOWN 36PTS IN 179PTS IN FYO2 3YRS 26 25.60 % 25 24 25.24 25 Cumulative Reductions $ $8
Slide 11: EBIT Margin Summary
EBIT MARGIN SUMMARY EBIT MARGIN UP 2 BASIS POINTS. FRANKLINS CONTRIBUTES 2% ON $1B SALES, EQUATED TO 3.46% EX-FRANKLINS - UP 8 BASIS POINTS O 3.49% OR %OOF S SALES S FOR O CONTINUING CO G BUSINESSES S SS S (EXCLUDING ( C G WHOLESALE) O S ) 3.6 3.4 3.38 3.40 % Margin n 3.2 3.27 3.23 30 3.0 3 08 3.08
Slide 12: EBIT Summary
EBIT SUMMARY FY02 Increase After After Goodw ill Goodw ill $m Food & Liquor 734.7 19.7% Petrol 12.7 176.1% Total Supermarkets 747.4 20.8% BIG W 93.5 93 5 12.1% 12 1% Consumer Electronics 28.0 -9.1% Total General Merchandise 121.5 6.4% Total Trading Result 868.9 18.6% Property 34.2 3.3% Central overh
Slide 13: Franklins Analysis
FRANKLINS ANALYSIS • 72 ex Franklins stores acquired, current status: – 13 trading as Food for Less – 54 trading as Woolworths / Safeway Supermarkets – 1 store to reopen as Woolworths Supermarket in F03 (now open) – 1 store t converted t d and d reopened d as D Dan M Murphy h (B (Belconnen) l ) – 3
Slide 14: Franklins Analysis
FRANKLINS ANALYSIS • Store sales results for F02 slightly above our acquisition expectation at $1 $1.05 05 bil ($1 ($1.01 01 bil excluding sales in respect of 4 stores sold in accordance with ACCC undertakings) • Store costs higher than existing Woolworths / Safeway stores but in line with acquisiti
Slide 15: Profit After Tax (After Wins)
PROFIT AFTER TAX (AFTER WINS) 550 523 2 523.2 500 450 428 0 428.0 $ Million 400 22.2% 364.0 17.6% 350 300.5 312.3 300 16.6% 3.9% 250 16.5% 200 1998 1999 2000 2001 2002 * * 53 Weeks 13
Slide 16: Earnings Per Share
EARNINGS PER SHARE 50 24 50.24 50 45 40 16 40.16 40 Centts 35 32 36 32.36 25.10% 30 26.54 27.25 24 10% 24.10% 25 18.75% 20 2.68% 14.10% 15 1998 1999 2000 2001 2002 14
Slide 17: Dividends Per Share
DIVIDENDS PER SHARE 36 33 33 30 27 27 nts 23 Cen 24 22.2% 21 17 18 17 4% 17.4% 18 27.8% 5.9% 15 6.3% 12 1998 1999 2000 2001 2002 15
Slide 18: Days Stock on Hand
DAYS STOCK ON HAND INVENTORY DOWN 3.3 DAYS WITH IN-STOCK POSITION RECORD HIGH 50 47 46.2 44.7 44 Days 40.8 40.6 41 Tand & Tandy Liberty 38 Liquor 37.3 35 1998 1999 2000 2001 2002 16
Slide 19: Return on Funds Employed
RETURN ON FUNDS EMPLOYED 40% 38.07% 36% 35.04% 32% % 29.08% 28% 26.83% 24.43% 24% 20% 1998 1999 2000 2001 2002 Based on average g of opening p g and closing g funds employed p y 17
Slide 20: Return on Equity
RETURN ON EQUITY 50 48.13 45 43.19 40 35 28.92 % 30 25 23 15 23.15 21.88 20 15 10 1998 1999 2000 2001 2002 Based on average g of opening p g and closing g Shareholders funds 18
Slide 21: Project Refresh
PROJECT REFRESH Restatement of Project Refresh after three years: • “Refresh” savings over the next five years to be no less than 1% of annual sales ie 20+ bp’s per annum • Refresh savings will be shared approximately 50/50 between customer and shareholder 19
Slide 22: Project Refresh
PROJECT REFRESH Cumulative savings $5.1 bil over 8 years Level III - Development 24.5% Level II - Logistics 24 10% 24.10% 18.75% 2.68% Level14.10% I - Reorganisation / line items 99 00 01 02 03 04 05 06 07 20
Slide 23: Project Refresh cumulative savings
PROJECT REFRESH 8 year cum savings = $5.1 bil 1,200 3.11% % of sales Savings in years 4 to 8 = $4.1 bil 1051 925 Level II Additional 1% of sales to 3.11% cumulative 900 807 Increasingly ngs $ m logistics driven 697 3 year Cum savings = $1.0 bil 595 PA Savin 2.11% of sales 600 517 368 Level I P 300 M
Slide 24: Growth
GROWTH Considerable opportunities for continuing growth in both revenues and earnings • Add 15 to 25 new Supermarkets per year for the foreseeable future • Expand BIG W at a rate of 6 - 8 per year (10 for 2002/2003 year) growing the chain from its current level of104 to150 • Grow liquor from sales o
Slide 25: Sales and Earnings Guidance
SALES AND EARNINGS GUIDANCE • As consistently stated previously, we anticipate sales will grow in the high single digits and earnings (EBIT and EPS) will grow in the low double digits for the foreseeable future • Sales and earnings guidance were reviewed at the end of the first quarter and left unch
Slide 26: Sales and Earnings Guidance
SALES AND EARNINGS GUIDANCE • Subject to current trends continuing and a satisfactory Christmas trading period, we now expect normalised (52 week) sales growth for 2002 / 2003, 2003 for f continuing ti i operations, ti will ill b be off th the order d off 10 10.5% 5% tto 11.0% (previous guidance ant
Slide 27: 2002 Annual General Meeting
2002 ANNUAL (GENERAL MEETING WOOLWORTHS LIMITED #%